Dyadic (AMEX:DIL)
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Dyadic International, Inc. (AMEX:DIL), a global biotechnology company
that uses its patented and proprietary technologies (the “Dyadic
Platform Technology”) to conduct research and
development activities for the discovery, development and manufacture of
products and enabling solutions to the bioenergy, industrial enzyme and
pharmaceutical industries, today announced financial results for the
year ended December 31, 2006.
Financial Results
Total net sales for the year ended December 31, 2006, were approximately
$15.4 million as compared to approximately $15.9 million for 2005. The
decline in sales primarily reflected lower prices in the textile
industry, which represented 65% of total sales for 2006 as compared to
72% of total sales for 2005. This decline was partially offset by an
increase in higher-margin sales to customers in the pulp & paper, animal
feed and other industries, which represented 35% of total sales for 2006
as compared to 28% of total sales for 2005.
Gross margin for 2006 increased to approximately $4 million, or 26% of
net sales, as compared to approximately $3 million, or 19% of net sales,
for 2005. This increase primarily reflected the Company’s
directed efforts to shift sales from the textile to the pulp and paper,
animal feed and other higher-margin industries.
2006 net sales to the pulp & paper industry increased by 41% versus
prior year to approximately $2.6 million from approximately $1.9
million, which represented 17% of net sales as compared to 12% of net
sales for 2005. Net sales to the animal feed industry increased by 31%
to approximately $1.4 million for 2006 from approximately $1.0 million
for 2005, which represented 9% of net sales versus 7% for the prior year.
Net loss for 2006 was approximately $10.9 million, or $0.45 per share
(basic and diluted), as compared to a net loss of approximately $10.5
million, or $0.48 per share (basic and diluted), for 2005.
Balance Sheet Highlights
At December 31, 2006, Dyadic reported working capital of approximately
$36.7 million, including cash and cash equivalents of $31.1 million.
This compares to working capital at December 31, 2005, of $16.6 million,
including cash and cash equivalents of $12.1 million. Stockholders'
equity at December 31, 2006, was $28.2 million, as compared to $15.3
million at December 31, 2005.
President and CEO Mark Emalfarb said, "We made substantial and
important progress on all fronts during 2006:
-- "We strengthened our executive management team and global
infrastructure, as highlighted by the hiring of Dr. Glenn Nedwin as
our Chief Science Officer, President of our BioPharma Business and
member of our board of directors;
-- "We entered into a new scientific collaboration with The Scripps
Research Institute to annotate the genome of our patented C1
fungus. We expect this project to help us enhance the Company's
leadership in the development of cost-effective enzyme mixtures and
related processing and manufacturing technologies for use in the
production of cellulosic ethanol and biotherapeutic proteins;
-- "We entered into a non-exclusive research and development and
commercialization agreement with Abengoa Bioenergy, R&D, Inc., a
subsidiary of Abengoa, S.A., the world's second largest ethanol
producer. Our objective is to develop cost-effective enzyme
mixtures and related processing and manufacturing technologies for
commercial application in Abengoa's cellulosic ethanol production
process. As part of this agreement, Abengoa Bioenergy paid $10
million to Dyadic to fund our research and development efforts and
was issued approximately 2.1 million shares of our common stock.
-- "Dyadic also joined one of Europe's leading producers of
bioethanol, Royal Nedalco, and other partners in R&D projects
funded by the Netherlands government to develop technologies to
produce ethanol from sugar beet pulp and wheat bran;
-- "We made substantial progress in our efforts to enhance our
knowledge and increase the capabilities of the Dyadic Platform
Technology, including our expression systems:
-- We developed the capability to over-express multi-enzyme
monocomponents in the same production host, leading to
lower-cost enzymes for cellulosic ethanol, and promising
production models for commercially important monoclonal
antibodies for human therapeutics;
-- We expressed stable, biologically active full-length
monoclonal antibodies in gram-per-liter quantities;
-- "We strengthened our balance sheet with the net proceeds received
from the closing of a $13 million private placement with several
institutional investors. Together with the proceeds from purchase
of our common stock by Abengoa Bioenergy, this increased Dyadic's
cash position to more than $31 million at December 31, 2006."
Mr. Emalfarb continued, “Building on these
accomplishments, we believe that we have positioned Dyadic to accelerate
our efforts on all fronts in 2007 and beyond. Among our primary goals
for 2007, we hope to enter into additional strategic collaborations
related to cellulosic ethanol and to further improve the efficiency of
cost-effective enzyme mixtures and related processing and manufacturing
technologies for applications in this growing market. We also expect our
C1 annotation project with Scripps and other initiatives to yield a
growing number of genes to facilitate the potential development of new
products for applications in all of our target markets. Our financial
resources, together with the advances we have made in our R&D
initiatives in bioenergy and biopharmaceuticals, and anticipated
continued growth in sales of our proprietary enzyme products for the
pulp & paper and animal feed industries, position Dyadic for further
progress in 2007 and beyond."
Glenn Nedwin, Chief Science Officer, added, "Our R&D efforts are focused
on providing a route to inexpensive sugar production from agricultural
biomass, a crucial step in the production of cellulosic ethanol. During
2006, we developed enzyme mixtures that successfully converted over 40
different biomass feedstocks into sugars and at higher yields than
previously achieved.
"Another significant development this past year was the award of a broad
U.S. patent that protects Dyadic's technology for high-throughput
robotic screening (HTS) in filamentous fungi using our proprietary
Dyadic Platform Technology. The C1 HTS Technology is expected to permit
rapid screening for the discovery of genes and the proteins and enzymes
they produce, as well as identification of improved protein variants
resulting from modifications to these genes. We believe this patent
strengthens Dyadic's 'one stop shop' model where gene discovery and
improvement, gene expression, and product manufacturing in quantities
from 1 ml to 150,000 liters can all be performed in the same host
organism.
"In addition to its applications in our Bioenergy Business, our HTS
technology also may improve the odds of identifying potentially useful
human antibodies and other classes of high-value human therapeutic
proteins, shorten R&D development timelines and reduce development costs.”
About Dyadic
Dyadic International, Inc., based in Jupiter, Florida, with operations
in the United States, Hong Kong and mainland China, Poland and The
Netherlands, is a global biotechnology company that uses its patented
and proprietary technologies (the “Dyadic
Platform Technology”) to conduct research and
development activities for the discovery, development, and manufacture
of products and enabling solutions to the bioenergy, industrial enzyme
and pharmaceutical industries. Dyadic's enabling solutions include
novel, cost-efficient production strains, enzyme mixes and related
fermentation processes currently in development to produce abundant,
low-cost fermentable sugars from agricultural residues and energy crops,
which can then be used in the production of cellulosic ethanol as well
as other products currently derived from petroleum. Dyadic also develops
low-cost production hosts for therapeutic protein production for the
biopharmaceutical industry, and manufactures more than 55 liquid and dry
enzyme and other biological products for more than 200 industrial
customers in approximately 50 countries for the textile, pulp & paper,
animal feed, food, starch, alcohol, and fuel ethanol industries.
Cautionary Statement for Forward-Looking Statements
Certain statements contained in this press release are
"forward-looking statements." These forward-looking statements involve
risks and uncertainties that could cause our actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. For a discussion of these risks and uncertainties, please
see our filings from time to time with the Securities and Exchange
Commission, which are available free of charge on the SEC's web site at http://www.sec.gov,
including our Annual Report on Form 10-KSB for the year ended December
31, 2006, and our subsequent filings with the SEC. Except as required by
law, we expressly disclaim any intent or obligation to update any
forward-looking statements.
Dyadic International, Inc.
Consolidated Balance Sheet
December 31, 2006
Assets
Current assets:
Cash and cash equivalents
$ 31,072,824
Accounts receivable, net of allowance for uncollectible accounts of
$240,490
2,788,588
Inventory
6,039,080
Prepaid expenses and other current assets
1,170,528
Total current assets
41,071,020
Fixed assets, net
1,813,468
Intangible assets, net
96,047
Goodwill
1,808,458
Other assets
348,387
Total assets
$ 45,137,380
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$ 2,238,585
Accrued expenses
1,905,382
Accrued interest payable to stockholders
48,897
Short term notes payable
191,125
Income taxes payable
26,730
Total current liabilities
4,410,719
Long-term liabilities:
Note payable to stockholder
2,378,832
Other liabilities
160,808
Deferred research and development obligation
9,997,863
Total long-term liabilities
12,537,603
Total liabilities
16,948,222
Stockholders’ equity:
Preferred stock, $.0001 par value:
Authorized shares – 5,000,000; none
issued and outstanding
--
Common stock, $.001 par value:
Authorized shares – 100,000,000; issued
and outstanding – 29,792,992
29,793
Additional paid-in capital
73,261,774
Notes receivable from exercise of stock options
(212,500)
Accumulated deficit
(44,889,909)
Total stockholders’ equity
28,189,158
Total liabilities and stockholders’ equity
$ 45,137,380
Dyadic International, Inc.
Consolidated Statements of Operations
Year Ended December 31
2006
2005
Net sales
$ 15,383,754
$ 15,882,969
Cost of goods sold (includes non-cash share-based compensation of
approximately $32,000 for 2006)
11,345,144
12,856,607
Gross profit
4,038,610
3,026,362
Operating Expenses:
Research and development (includes non-cash share-based
compensation of approximately $89,000 and $19,000 for 2006 and
2005, respectively)
4,236,448
4,655,486
Sales and marketing (includes non-cash share-based compensation of
approximately $75,000 for 2006)
3,417,013
2,808,937
General and administrative (includes non-cash share-based
compensation of approximately $592,000 and $58,000 for 2006 and
2005, respectively)
7,149,005
5,564,619
Foreign currency exchange gains, net
(28,704)
(16,785)
Total operating expenses
14,773,762
13,012,257
Loss from operations
(10,735,152)
(9,985,895)
Other income (expense):
Interest expense
(594,163)
(710,537)
Investment income
504,894
249,280
Minority interest
(13,355)
(4,725)
Other income, net
18,696
1,535
Total other expense
(83,928)
(464,447)
Loss before income taxes
(10,819,080)
(10,450,342)
Provision for income taxes
63,112
64,228
Net loss
$ (10,882,192)
$ (10,514,570)
Net loss per common share:
Basic
$ (0.45)
$ (0.48)
Diluted
$ (0.45)
$ (0.48)
Weighted average shares and equivalent shares used in calculating
net loss per share:
Basic
24,419,097
22,132,158
Diluted
24,419,097
22,132,158